Mich. Admin. Code R. 451.1.2 - Broker-dealer definition exclusion
Rule 1.2. As used in these
(a) A "finder" as that term is defined by
section 102(i) of the act , MCL 451.2102(i).
(b) A person whose participation in an offer
or sale of securities, for direct or indirect compensation, is limited to
introducing 1 or more accredited investors, as that term is defined in SEC rule
501,
17 C.F.R. §
230.501, who are residents of this state to
an issuer incorporated or organized in this state, or introduces an issuer
incorporated or organized in this state to 1 or more accredited investors who
are residents of this state, solely for the purpose of a potential offer or
sale of the issuers securities in an issuer transaction in this state, and who
complies with all of the following:
(i) The
person shall not engage in any of the following activities:
(A) Provide introductions to an issuer for a
transaction or a series of related transactions in connection with the offer or
sale of the issuers securities that exceeds a purchase price of $15,000,000.00
in the aggregate.
(B) Participate
in negotiating any of the terms of the offer or sale of the
securities.
(C) Advise any party to
the transaction regarding the value of the securities or the advisability of
investing in, purchasing, or selling the securities.
(D) Participate in the preparation, delivery,
or execution of the issuers disclosure documents, offering circulars,
contracts, or other documents related to the transaction except as provided for
in subrule (b)(iii) of this rule.
(E) Conduct any due diligence on behalf of an
issuer or on behalf of a potential purchaser of an issuers
securities.
(F) Sell or offer to
sell in connection with the issuer transaction any securities of the issuer
that are owned, directly or indirectly, by the person .
(G) Receive, directly or indirectly,
possession or custody of any funds or securities in connection with an issuer
transaction for which the person is engaged.
(H) Receive compensation in connection with
any introduction that results in the offer or sale of securities without
reasonable grounds to believe the offer or sale complies with section 301 of
the act , MCL 451.2301.
(I) Receive
transaction -based compensation.
(ii) The person and the issuer shall enter
into a written agreement before any introduction facilitated by the person in
connection with the potential offer or sale of the issuers securities. The
agreement must include the following:
(A) The
type and amount of compensation that has been or will be paid to the person in
connection with the introduction and the conditions for payments of that
compensation.
(B) That the person
is not providing advice to the issuer or any person introduced by the person to
the issuer as to the value of the securities or the advisability of investing
in, purchasing, or selling the securities.
(C) Whether the person , a related person , or
a member of the persons immediate family, has any beneficial interest in the
securities being offered or sold by the issuer.
(D) Any actual or potential conflict of
interest in connection with the persons participation in the potential
securities transaction .
(iii) The person shall provide a copy of the
written agreement required by subdivision (b)(ii) of this rule to any potential
purchaser of securities before making any introductions in reliance on this
rule, and receive written acknowledgement from the potential purchaser of
delivery of the written agreement.
(iv) Copies of all written agreements and
acknowledgements required by subdivision (b)(ii) and (iii) of this rule entered
into by the person must be maintained by the person for a period of 5 years
from the date the agreement or acknowledgement is signed by all parties , and
must be provided to the administrator upon the administrators
request.
Notes
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